Infrastructure & Environment

House Passes Short-Term Fix for Highway Trust Fund

by | July 16, 2014
 

By Michael A. Memoli and Christi Parsons

President Barack Obama hopped into the driver's seat of an automobile simulator Tuesday, but the feeling of flying along at 90 mph lasted only as long as the photo opportunity.

"I think I had a little bit of a lead foot," he joked later, noting that he hasn't driven a real car in six years. "It got me a little queasy."

Obama had another strange moment later when a last-ditch GOP measure that he had accepted to keep highway construction going sailed through the Republican-controlled House of Representatives, which tends to kill nearly anything the White House supports.

The House plan, which passed 367 to 55, would provide $10.8 billion to replenish, until May, the Highway Trust Fund, which is on track to run out of money Aug. 1. A longer-term funding source is still elusive, as are most goals on Obama's legislative agenda.

With Republicans and Democrats bitterly divided over how to pay for things, even the long-standing bipartisan tradition of filling potholes has become a challenge.

The political dispute is not about the highway projects, which members of Congress covet for their states and districts, but about how to create a long-term financing system for the trust fund that pays for them.

Its primary funding source, a tax on gasoline and diesel fuel, hasn't been raised since 1993. If it was adjusted for inflation, the 18.4-cents-per-gallon gas tax would need to be 29 cents per gallon today to have the same purchasing power, according to the Center for American Progress, a liberal think tank. Moreover, gas tax revenues have fallen as vehicles have become more fuel-efficient.

The Congressional Budget Office projects an average annual shortfall of about $15 billion through 2020.

The White House proposes to inject billions of dollars from corporate tax reform, an idea with some support but little chance of moving forward this year. Republicans refuse to consider any increase in fuel taxes, but few have identified other possible funding sources.

The tussle this year raised fears of a "transportation shutdown," similar to the 16-day shutdown of most federal offices and operations last fall. The White House warned that thousands of construction projects would grind to a stop and that 700,000 people could lose their jobs if Congress let the highway fund run dry.

The House plan would prevent that, but neither side seemed especially pleased.

During his tour of the Turner-Fairbank Highway Research Center in McLean, Va., Obama critiqued the House plan as "kicking the can down the road for a few months, careening from crisis to crisis when it comes to something as basic as our infrastructure."

The conservative group Heritage Action for America similarly derided the House plan as "chock-full of gimmicks and revenue raisers." No one, said spokesman Dan Holler, thinks the stopgap measure "represents good policy."

In recent months, Rep. Dave Camp, R-Mich., the departing chairman of the House Ways and Means Committee, has explored overhauling the tax code to free up money to pay for eight years' worth of road projects.

Major tax reform is unlikely in an era of legislative gridlock, so the House found another source. The $10.8 billion would come from a provision allowing some companies to defer some payments to employee pension funds, thereby increasing taxable profits in the short term.

House Speaker John A. Boehner, R-Ohio, defended the plan, noting that Senate Democrats hadn't settled on an alternative.

"If the president has a plan for a longer-term highway bill, he ought to get the Democratic-controlled Senate to pass it and we'll take a look at it," Boehner said. "But until then, giving speeches about a long-term highway bill is frankly just more rhetoric."

Senate Democrats appeared resigned to accepting the GOP plan. Majority Leader Harry Reid, D-Nev., said he intended to act quickly on the House bill, although Democrats may seek changes in hopes of revisiting it after the November election.

"There's pretty broad bipartisan agreement that there's not going to be a magic funding source that's going to grow out of a tree between now and next spring," said Sen. Christopher S. Murphy, D-Conn., who has proposed raising the gas tax to fix the highway fund.

Obama, meanwhile seemed more excited about the black Saturn simulator than the highway bill's passing the GOP-controlled House. He climbed in and grabbed the wheel in front of a video screen that showed cars and trucks whizzing by.

"They are finally letting me drive again," he said. "Man, this is so exciting. I haven't been on the road in a long time.

(c)2014 Tribune Co.

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